Question

Assume you own more than one business. The financial records are prepared separately for each business. The records are also separate and distinct from your personal finances. This methodology relies on the going concern concept. (If false, identify error and correct.)

a. True.
b. False.

Answer 1

The correct answer is letter "B": False.

Step-by-step explanation:

The Accounting Entity principle states that the transactions of a business must be recorded separately from the personal transactions of the owners or other businesses. This principle relies on the fact that businesses are recognized as separate economic units.

Thus:

Assume you own more than one business. The financial records are prepared separately for each business. The records are also separate and distinct from your personal finances. This methodology relies on the Accounting Entity principle.